Equifax’s Global Consumer File will help lenders make more informed decisions for newcomers who have not already established a credit history in Canada.Tami Chappell/Reuters
Equifax Canada Inc. EFX-N has launched a new service to help newcomers access their credit history from their countries of origin in order to give them better access to financial and other products in Canada.
The consumer credit-reporting agency’s Global Consumer File will help lenders make more informed decisions for newcomers who have not already established a credit history in Canada.
The service will be first available to newcomers from India, which accounted for 27 per cent of new permanent residents, 45 per cent of international students and 22 per cent of temporary foreign workers in 2022, according to Immigration, Refugees and Citizenship Canada.
Lack of a Canadian credit history has posed a challenge for newcomers when it comes to accessing financial services such as housing and credit cards, said Enoch Omololu, founder of Savvy New Canadians, a personal finance platform for newcomers.
As a result, Mr. Omololu said that newcomers have to settle for payday loans or loans with high interest rates.
Sue Hutchison, Equifax’s president and chief executive officer, said the new service will remove those barriers for newcomers by helping lenders access international credit data. “We have a lot of our clients that are very excited and a lot of demand.”
With Equifax already operating in India, newcomers will be able to consent to a Canadian lender accessing their credit history from their home country. This service will also be available to those who are already settled in Canada and wish to use their international credit history.
This process will be available both digitally and in-person at bank branches. Additionally, all Canadian banks with access to Equifax reports will have access to the new data, Ms. Hutchison said.
Because credit rating systems can vary by country, Equifax is developing a system to enable lenders to understand how international credit scores translate in the Canadian context. Additionally, these credit scores can be used to expand credit lines. After a few months, lenders can review the newcomer’s credit history and potentially increase their credit limits based on their financial behaviour as they settle in Canada, Ms. Hutchison said.
The agency has plans to expand the service to newcomers from Brazil, Argentina, and Chile over the coming months and to include 18 countries in total in the future, the company said in a statement. Ms. Hutchison said Equifax also plans to collaborate with other credit bureaus.
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